Why Parliament Intervened: the Road to the Regulating Act

A government that could not govern itself. In Bengal the Governor could be, and was, overruled by his Council; Madras and Bombay acted independently of Bengal and sometimes against it, making war and treaties on their own account. Nobody in India was in charge of India, and nobody in England was in charge of the men in India.

What Parliament decided to do about it

The Act works on three levels at once, and an answer that separates them is much easier to follow than one that does not.

In England, it altered the Company's own constitution: the qualification for voting in the Court of Proprietors, that is, the general body of shareholders, was raised, and Directors were to be elected for four years with a quarter retiring annually instead of the whole body being elected each year. The object was to make the Directors less dependent on shifting majorities of shareholders.

In India, it created a Governor-General of Fort William in Bengal with a Council of four, gave that government a power of superintendence over Madras and Bombay, and gave it a power to make rules, ordinances and regulations.

Above both, it created a Supreme Court of Judicature at Fort William, of a Chief Justice and three other judges appointed by the Crown, and required the Company to transmit its correspondence about revenue and civil and military affairs to the Government in England.

Why a court, and why a Crown court

This is the question the paper most often asks in some form, and the answer has two halves.

The first half is that a government of servants could not be controlled by a court of servants. Every court in the Presidency Towns was staffed by the Company's own people; every court in the mofussil was the Collector, the amil or the Provincial Council. If the object was to make the Company's servants answerable, an answerable court had to come from outside the Company.

The second half is that Parliament was thinking about Englishmen in India, not about Indians. The abuses complained of in England were abuses committed by the Company's servants, and the remedy chosen was a court that could try them. That is why the Act's own jurisdiction clause, section 14, speaks of British subjects and of persons in the Company's service.

The consequence of that focus is the whole of the next six chapters. A court designed to control Englishmen was placed in a country of twenty million Indians, with no clear rule about which of them it could judge or by what law, and the collision was immediate.

A worked example

Put yourself in the House of Commons in 1773 with the Committees' reports in front of you. Three complaints have been proved to your satisfaction.

1. A Governor has taken presents from an Indian ruler, and no court in India will try him for it.
2. A Council in Bengal has made war on its own account, and the Company in London learned of it months later.
3. The Company cannot pay its debts, and asks the Treasury for a loan.

The Act answers each. Section 23 forbids presents and private trade to the Governor-General, the Councillors and the judges. Sections 9 and 10 put Madras and Bombay under the superintendence of a Governor-General named in the Act, and sections 36 and 37 require the rules made in Bengal to be sent home. Sections 39 and 40 make an offence committed in India by a Governor-General, a Councillor or a judge triable in the Court of King's Bench in England. And section 13 creates a court in Calcutta that is not the Company's.

What beginners get wrong

"The Regulating Act was passed to reform the administration of justice in India." It was passed to regulate the East India Company. Its long title says so. The Supreme Court is one provision among many, and the Act's preamble does not mention justice at all.

"The Act made the Crown the ruler of India." It did not. The Company kept its territories and its revenues. What Parliament took was a measure of supervision, and even that was indirect. Crown government arrives in 1858.

"The Act created the Supreme Court." Strictly, it did not. Section 13 empowered His Majesty to erect and establish a Supreme Court by charter. The court itself was created by the Charter of 26 March 1774, and the distinction between the Act and the Charter is one that examiners like.

Limits and criticism

The most damaging criticism of the Act is not that it did too little but that it was drafted without anybody asking what it would do when it arrived.

It gave a Governor-General a Council that could outvote him, and then named the Councillors in the Act itself so that he could not be rid of them for five years. It created a court with English process and English judges and did not say what law that court was to apply to Indians. It gave the Council a power to make regulations and made those regulations void until registered in the very court whose jurisdiction was in dispute.

The judges of the Supreme Court themselves said later that the legislature had passed the Act without sufficiently investigating what it was doing, and that if the Act did not say more than was intended, it at least said more than was well understood. That is a fair summary, and the next six chapters are the proof of it.

Quick revision

• Long title: "An Act for establishing certain Regulations for the better Management of the Affairs of the East India Company, as well in India as in Europe."
• Causes: the Company's financial crisis and application for a loan; scandal over presents and private trade; the reports of the Select and Secret Committees; and a government in India that no one controlled.
• In England: the qualification to vote in the Court of Proprietors raised; Directors elected for four years, a quarter retiring annually.
• In India: a Governor-General and Council of four at Fort William, with superintendence over Madras and Bombay, and a power to make rules.
• A Supreme Court of Judicature to be erected by royal charter.
• The preamble mentions neither justice nor the people of Bengal.

Test yourself

1. Give the two reasons the Act's own preamble states. That the powers granted by charter had proved insufficient to prevent abuses in the government and administration of the Company's affairs at home and in India, to the injury of public credit and of the Company's commercial interests; and that the annual election of Directors weakened their authority and produced instability.

2. Why did Parliament think a Crown court was necessary, when courts already existed in Calcutta? Because every existing court was staffed by the Company's own servants, and the object was to make those servants answerable. A court of the Company could not control the Company.

3. Distinguish the Act from the Charter of 1774. Section 13 of the Act empowered the Crown to erect a Supreme Court by charter; it did not itself create one. The court was created by the Charter of 26 March 1774 granted under that power.

4. What was the Act's chief drafting weakness? It said who the Court could judge without saying what law it should apply, gave the Governor-General a Council that could outvote him and then named the Councillors in the statute, and made the Council's regulations depend on registration in the court with which the Council was in dispute.